they receive. “Despite the important part which this method plays in practice, we are excluded from considering it here by our assumption that all commodities, including labour-power, are bought and sold at their full value” (431). So once again, acceptance of the market logic and the theses of classical political economy take precedence over the study of actual practices, demonstrating once more Marx’s commitment to deconstructing the utopian theses of classical political economy on their own terms. One other peculiar result arises out of Marx’s mode of reasoning. “An increase in the productivity of labour in those branches of industries which supply neither the necessary means of subsistence nor the means by which they are produced leaves the value of labour-power undisturbed” (432). Therefore, reducing the value of luxury goods by increasing productivity does not yield relative surplus-value. It is only the declining value of wage goods that matters.
This produces a conundrum. Why would individual capitalists raise the productivity in their own particular industry producing a wage good, when all capitalists will benefit? This is what is now called a free-rider problem. The individual capitalist who goes out, innovates, reduces the price of a wage good and so reduces the value of all labor-power gains no particular or singular benefit from so doing. The benefit accrues to the whole capitalist class. Where is the individual incentive to do that?
Could relative surplus-value arise through a class strategy? While Marx does not mention it in this chapter, he earlier related a case where this was so—the abolition of the Corn Laws (tariffs on wheat imports) as a result of the collective agitation of the Manchester industrialists. The cheaper wheat imports that resulted brought down the price of bread, and this allowed wages to be reduced. This sort of class strategy turns out to have been of great historical importance. The same reasoning exists now in the United States with respect to the supposed advantages of free trade. The Wal-Mart phenomenon and cheap imports from China are welcomed because cheap goods reduce the cost of living to the working classes. The fact that money wages have not risen much for workers over the past thirty years is made more palatable since the physical quantity of goods they can acquire has increased (provided they shop at Wal-Mart). In exactly the same way that the nineteenth-century British industrial bourgeoisie wanted to reduce the value of labor-power by allowing cheap imports, so the reluctance to block cheap imports in the United States today derives from the need to keep the value of labor-power stable. Protectionist tariffs, while they might help keep jobs in the United States, would result in price increases which would create pressures for higher wages.
It turns out historically that there have been many state-organized strategies to intervene in the value of labor-power. Why, for example, does the State of New York not charge sales taxes on food? Because that is seen as fundamental to the determination of the value of labor-power. On occasion, the industrial bourgeoisie has supported rent control, cheap (social) housing and subsidized rents and agricultural products because that, too, keeps the value of labor-power down. So we can identify many situations where there have been and still are class strategies worked out through the state apparatus to reduce the value of labor-power. To the degree that the working classes gained a modicum of access to state power, they could use it to increase their income in kind (through state provision of many goods and services) and so raise the value of labor-power (in effect claiming back a part of the potential relative surplus-value for themselves).
Marx eschews any mention of these kinds of issues in this chapter almost certainly for the same reason he dismissed the way capitalists perpetually seek to purchase labor-power at less than its value. Conscious class strategies and state interventions are not admissable in the theoretical framework Marx has established. We don’t necessarily have to follow him all the way on this, particularly to the degree we are interested in actual histories. But he nevertheless accomplishes something very profound by sticking to the restrictive assumptions of free-market utopianism. He shows how and why individual capitalists might be impelled to innovate (without any class or state interventions) even though the return on their innovation goes to the whole capitalist class.
“When an individual capitalist cheapens shirts, for instance, by increasing the productivity of labour, he by no means necessarily aims to reduce the value of labour-power and shorten necessary labour-time in proportion to this.” The individual capitalist does not act on the basis of a generalized class consciousness even though “he contributes towards increasing the general rate of surplus-value” through his actions. Marx then warns: “the general and necessary tendencies of capital must be distinguished from their forms of appearance.” This peculiar phrasing signals that something special is going on (the odor of fetishism is in the air). So what’s he getting at?
While it is not our intention here to consider the way in which the immanent laws of capitalist production manifest themselves in the external movement of the individual capitals, assert themselves as the coercive laws of competition, and therefore enter into the consciousness of the individual capitalist as the motives which drive him forward, this much is clear: a scientific analysis of competition is possible only if we can grasp the inner nature of capital, just as the apparent motions of the heavenly bodies are intelligible to someone who is acquainted with their real motions, which are not perceptible to the senses. (433)
Now we need to think long and hard, critically and carefully, about what he is saying. I earlier suggested you remain alert for when the coercive laws of competition come into the argument, and plainly they do so here. Yet Marx seems to want to downplay their import even as he recognizes that he cannot do without them. At this point, I can only offer my own interpretation, knowing full well that many will disagree with me. I think there is a certain parallel between the way in which Marx analyzes the role of supply and demand fluctuations and the role of competition. In the case of supply and demand, Marx concedes that these conditions play a vital surface role in generating price movements for a particular commodity, but when supply and demand are in equilibrium, he argues, supply and demand fail to explain anything. Supply and demand cannot explain why shirts exchange for shoes on average in the ratio that they do. This has to be explained by something totally different, congealed socially necessary labor-time, or value. This does not mean that supply and demand are irrelevant, because without them there could be no equilibrium price. Supply and demand relations are a necessary but not sufficient aspect of a capitalist mode of production. Competition between individual capitalists within a particular line of commodity production plays a similar role. In this instance, however, it redefines the equilibrium position—the average price or value of the commodity—through changes in the general level of productivity in that line of commodity production. Competition as Marx here depicts it is a sort of epiphenomenon that occurs on the surface of society, but, like exchange itself, it has some deeper consequences that cannot be understood by reference to competition. This was the position he took in the Grundrisse: competition does not establish the laws of motion of capitalism
but is rather their executor. Unlimited competition is therefore not the presupposition for the truth of the economic laws, but rather the consequence—the form of appearance in which their necessity realizes itself … Competition therefore does not explain these laws; rather it lets them be seen, but does not produce them.1
Let use see how this process works out in this instance. “For the understanding of the production of relative surplus-value, and merely on the basis of the results already achieved, we may add the following remarks” (433). The value of a commodity, recall, is fixed by the socially necessary “labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society” (129). What happens if an individual capitalist departs from this social average and sets up a productive system which is super-efficient and instead of producing ten widgets in an hour produces twenty? If one capitalist does that but all the others still produce at the rate of ten, then this one capitalist can sell at or close to the social average of ten while producing and selling twenty. “The individual value of these articles is now below their social value; in other words, they have cost less labour time than the great bulk of the same article produced under the average social conditions” (434). The innovative capitalist gains
